India’s largest steel producer Steel Authority of India Ltd (SAIL) on Monday reported a 18% year-on-year fall in net profit at Rs 696 crore for the quarter ended June 2012 due to high input costs, foreign exchange losses and sluggish sales. The company had reported a net profit of Rs 848 crore during the same quarter of the previous fiscal year.
The company said that steel prices are expected to remain stable for the next quarter, although input costs are still at an unsustainable level.Indian steel consumption has waned in recent quarters after growing in double-digits over the past few years as country’s economic growth has slowed.
SAIL said it incurred a foreign exchange loss of Rs 257 crore during the quarter, mainly on account of the weaker rupee. During the quarter, rupee slid 8.5% against the dollar.
“These are really sluggish market conditions (globally)...we cannot remain insulated from the happenings of the European and the US markets,” said CS Verma, chairman, SAIL.
The company's stock rose marginally by 0.7% to close at R85 on the BSE on Monday.